India becomes top exporter to GCC.

India became the largest exporter to Gulf oil producers in 2010 after overtaking the region’s long-standing top Western suppliers, banking on its strong political ties with those countries, competitive products and its proximity to the area.

China, which was a negligible trade partner of the region two decades ago, emerged as the second largest exporter to the six-nation Gulf Cooperation Council (GCC) in 2010, according to a Qatari bank study.

With the largest foreign community in the GCD, India was also the second largest market for regional products in 2010 following a sharp rise in its oil imports.

The study by Qatar National Bank (QNB) showed the GCC’s combined imports of goods stood at round $350 billion in 2010.

India provided nearly 12 per cent of those imports, allowing it to overtake China, which was the dominant exporter to the 31-year-old Gulf alliance in 2009.

“The GCC sources its imports from a diverse and steadily shifting range of countries. According to IMF data, imports from India jumped by around 40 per cent in 2010, causing it to surpass China as the largest supplier to the GCC, providing 12 per cent of total imports,” QNB said.

It said China itself surpassed the United States in 2008 but added that the US may actually still be the largest supplier to the GCC market.

This is because 79 per cent of GCC imports from India and 59 per cent from China were received by the UAE, which implies that a sizable proportion of them were destined for re-export outside the region.

In comparison, only 37 per cent of imports from the US arrived in the UAE, suggesting a higher proportion was bound for domestic consumption.

Japan remained a key exporter to the GCC, with a share of 6.5 per cent although it was the top supplier in the 1990s and in the second place until 2004.

The European Union as a whole provided 25 per cent of the GCC’s imports in 2010, down from an average of 30 per cent over the previous decade.

“Lower cost manufactured goods from China and food and textiles from India were among key factors that have driven the shift in import sources to these countries, away from Western nations that produce higher-end manufactured goods and industrial equipment,” the report said.

It showed Japan was the top market for GCC products given its heavy reliance on the region’s crude oil and gas, with a share of 15.6 per cent in 2010.

India was the second market, with a share of around 10.9 per cent, following by South Korea with nearly 10.1 per cent. China came fourth with a share of 8.6 per cent while the MENA region was fifth with nearly seven per cent.

“India and China have rapidly risen in importance as export destinations for the GCC, as their economies have grown and sought new supplies of oil and gas. A decade ago China only purchased three per cent of GCC exports, and India just one per cent…now India is the second most important export market, at 10.8 per cent, and China the fourth at 8.6 per cent,” QNB said.“These shares are likely to increase even further in the future as growth in India and China continues to outperform that in the US and EU.”

Source : emirates247.com